The number of farmers registering to sell wheat to state agencies in Madhya Pradesh has plummeted by more than 17% because of the rush for wheat by private players. This is due to a rise in worldwide pricing as a result of the Russia-Ukraine conflict.
According to official sources, approximately 1.98 million farmers sought to sell wheat to government agencies until March 10 (the last date for registration), compared to around 2.4 million last year over the same period.
This is the first time in a long time that Madhya Pradesh, one of the most important states for purchasing wheat for the Central pool, has done so.
It has been the greatest provider to the Central pool after Punjab over the past few years, surpassing Haryana.
"As a result of the decline in registrations, we may have to reduce our procurement target from 12.8 million tons to about 10 million tons as of today," said Deepak Saxena, Madhya Pradesh's director of food and civil supplies.
The dramatic and unusual reduction, according to Saxena, has two key causes.
The first reason is the government's decision to require all applicants to provide their Aadhaar numbers for authentication, and the second, and more powerful, the cause is the abrupt increase in mandi pricing.
"We are buying wheat at a minimum support price of Rs 2,015 per quintal, whereas the average price given in numerous mandis in the state for the previous 10-15 days has been substantially higher, about Rs 2,300-2,400 per quintal," Saxena added.
The state government had planned to store about 14 million tons of wheat this year by vacating space previously held by chana and other crops, but it now appears that the extra room will be unnecessary.
Long lines of tractors are forming outside all of Madhya Pradesh's big mandis, where the product is sold.
"Until a few weeks ago, wheat was selling for approximately Rs 2,000 per quintal, but prices have suddenly risen to Rs 2,300-2,500, which is why farmers are eager to liquidate their grain as soon as possible," said a farmer in Madhya Pradesh's Mandsaur area.
He anticipated the trend will continue after Holi when the number of visitors is expected to increase.
In the backdrop of the Russia-Ukraine crisis, Indian wheat prices in foreign markets soared to over $360 per tonne (FOB), before settling at $340-350 per tonne.
Indian wheat remains the cheapest among all worldwide competitors at the moment.
Because wheat from Ukraine and Russia would be unavailable on world markets for the next few months, Indian traders will have the opportunity to transport record volumes this fiscal year and even in FY23.
India is set to export a record 7-7.2 million tons this fiscal year, according to trade and government sources.
If global market circumstances stay favorable and outbound shipments are not restricted, exports might reach around 10 million tons in 2022-23.
India is expected to break the record in 2022-23 by harvesting over 111 million tons of wheat, which is almost 2 million tons more than this year.
